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Most High-Yield CEFs Show Great One-Year Returns: Dump The Underachievers

Published Fri, 10 Aug 2012 11:49:40 -0400 on Seeking Alpha

Today I was planning to review another sector of the high-yield, closed-end fund universe. The article would have been a followup to the recent Limited Term Closed-End Funds article published a few weeks ago. However, when I opened up my return tracking database, I was struck by the consistent and attractive returns provided by most high-yield CEFs over the last year. The number of under-performing funds was a very small percentage of the total, so I thought I would highlight the group of underachievers.
Background
I have put together a database of high-yield, closed-end funds. My criteria were a distribution yield of 6% or greater and at least $250 million of assets. There is some flexibility in the criteria to include interesting funds not quite up to the standards. The list consists of 102 CEFs which I have divided into 12 sub-sectors.
I use spreadsheets to determine fund returns for the various time periods. The returns are calculated from the Yahoo Finance adjusted share prices and from the day I open up the spreadsheet. For example, today -- August 9 -- the one year returns were calculated since August 10, 2011. Individual fund data pulled from CEFConnect.com.
Underachievers List and Discussion
Duff & Phelps Global Utility Income Fund Inc (DPG) provided a total return of 3.1% over the last year, about 4% below the fund's dividend yield. The other four funds in the Utilities category produced returns from 18.5% to 44%. DPG currently trades at a 2% premium to NAV.
Western Asset/Claymore Inflation-Linked Opportunities & Income Fund (WIW) and Western Asset/Claymore Inflation-Linked Securities & Income Fund (WIA) have under-performed in the Investment Grade Bonds category. The two funds posted one-year returns of 6.6% and 4.1% respectively compared 14% to 22% returns for the other funds in the category. The lower performance is probably due to the investment objectives of these two funds in relation to the bond market conditions for the last year. Both funds are trading at a 10% discount to NAV.... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
ING RISK MANAGED NAT RES FUND 4.40   0.0 0.00 0.00 14.83
GABELLI GLOBAL GOLD NAT RES & INC TRUST 4.44   0.0 0.00 0.00 13.48
DREYFUS HIGH YIELD STRATEGIES 3.07   0.0 0.00 0.27 9.63
ALPINE TOTAL DYN DIVIDEND 8.33   0.0 0.00 0.00 8.33

ING RISK MANAGED NAT RES FUND - IRR
ING RISK MANAGED NAT RES FUND - IRR  


Older articles featuring Ing Risk Managed Nat Res Fund (IRR):
Option-Income Equity CEFs: 10% Yields With Some Defense For Your Portfolio
24 CEFs Yielding Over 10% Trading At A Discount To NAV: Part IV, 2% To 5% Discount
10%-Plus-Yield CEFs: 3 To Buy And 1 To Avoid
10% Dividend Yields From Closed-End Funds
Payback Periods For Discount CEFs With Dividends
Dividend Investing: Closed-End Funds vs. ETFs
30 Closed-End Funds With Dividends Over 10%

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